DCF Studio

    PEG · NYQ · Utilities

    Public Service Enterprise Group Incorporated

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 27.62

    Market price

    USD 74.38

    Implied upside

    -62.9%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedCapital expenditure runs at 29.7% of revenue against depreciation of 12.6%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 27.62-62.9%
    Exit multiple
    USD 59.44-20.1%
    Market price
    USD 74.38

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 12.8bnUSD 13.3bnUSD 13.7bnUSD 14.2bnUSD 14.6bnUSD 15.1bnUSD 15.5bnUSD 15.9bnUSD 16.3bnUSD 16.7bn+3.0%
    EBITUSD 3.1bnUSD 3.2bnUSD 3.3bnUSD 3.4bnUSD 3.5bnUSD 3.6bnUSD 3.7bnUSD 3.8bnUSD 3.9bnUSD 4.0bn+3.0%
    NOPATUSD 2.7bnUSD 2.8bnUSD 2.9bnUSD 3.0bnUSD 3.1bnUSD 3.2bnUSD 3.3bnUSD 3.4bnUSD 3.5bnUSD 3.5bn+3.0%
    Add depreciation & amortisationUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.8bnUSD 1.8bnUSD 1.9bnUSD 1.9bnUSD 2.0bnUSD 2.1bnUSD 2.1bn+3.0%
    Less capital expenditureUSD -3.8bnUSD -3.8bnUSD -3.8bnUSD -3.8bnUSD -3.7bnUSD -3.7bnUSD -3.6bnUSD -3.6bnUSD -3.5bnUSD -3.4bn-1.2%
    Capex, % of revenue29.7%28.7%27.6%26.6%25.6%24.6%23.6%22.5%21.5%20.5%-
    Less increase in working capitalUSD -95.2mUSD -63.0mUSD -62.9mUSD -62.7mUSD -62.2mUSD -61.6mUSD -60.9mUSD -59.9mUSD -58.8mUSD -57.5m-5.4%
    Free cashflow to firmUSD 421.2mUSD 607.6mUSD 771.1mUSD 943.7mUSD 1.1bnUSD 1.3bnUSD 1.5bnUSD 1.7bnUSD 1.9bnUSD 2.2bn+19.9%
    Discount factor0.96820.90760.85080.79750.74760.70080.65690.61580.57720.5411-
    Present valueUSD 407.8mUSD 551.5mUSD 656.0mUSD 752.6mUSD 841.3mUSD 922.1mUSD 995.1mUSD 1.1bnUSD 1.1bnUSD 1.2bn-
    Present Value Of The ForecastUSD 8.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.659Reported 0.491, pulled toward 1.0 (Blume)
    Cost of equity7.68%Risk-free + beta x equity risk premium
    Cost of debt5.78%Risk-free + 89bp, the spread for a A- rating at 3.1x interest cover. Book interest / average debt was lower, at 4.1%.
    Market capitalisationUSD 37.1bn60.5% of capital
    Total debtUSD 24.2bn39.5% of capital, book value as a proxy
    Tax rate11.1%Effective, capped at statutory
    WACC6.68%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 27.62

    78% of EV

    Forecast FCFF, final year
    USD 2.2bn
    Capex at depreciation, working capital in reinvestment
    USD 3.5bn
    Less reinvestment at g/ROIC (37.4% of NOPAT)
    USD -1.3bn
    Capitalised
    USD 2.2bn
    ROIC (WACC floor)
    6.7%
    Terminal value, undiscounted
    USD 54.4bn
    Terminal value, discounted
    USD 29.4bn
    Enterprise value
    USD 37.9bn
    Less net debt
    USD 24.1bn
    Equity value
    USD 13.8bn

    Exit at 13.8x EBITDA

    Value per shareUSD 59.44

    84% of EV

    Terminal value, undiscounted
    USD 83.9bn
    Terminal value, discounted
    USD 45.4bn
    Enterprise value
    USD 53.8bn
    Less net debt
    USD 24.1bn
    Equity value
    USD 29.8bn

    Spread between methods: 73%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.68%83.0387.2994.27106.38130.17
    5.68%48.5047.5346.7546.2646.26
    6.68%30.2328.9327.6226.3225.02
    7.68%17.8716.8015.7214.6513.58
    8.68%8.487.586.685.784.89

    Outlined: this model. Green text: above today's price of 74.38. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year7.5%3.2%8.7%
    EBIT margin32.8%23.8%35.4%
    Discount rate-6.7%5.0%
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.